The Local Power Plan: Putting Clean Power in Communities’ Hands

Great British Energy and the Department for Energy Security and Net Zero have unveiled the Local Power Plan — up to £1 billion in funding for what they describe as the UK’s “largest public investment in community energy”. Sophie Read explains the details. 

Introduction

Great British Energy (GBE) and the Department for Energy Security and Net Zero (DESNZ) published their Local Power Plan, which is backed by up to £1 billion of funding from GBE, on the 9^th February 2026. The aim of the Local Power Plan is to put communities at the forefront of their clean energy, which will reduce bills, generate revenue, create jobs, protect the environment, and decrease reliance on fossil fuels. GBE will contribute to the plan through both resources and know-how, which will be available to a range of participants from small scale power plants to public buildings and social housing, and to local communities and individuals. This will open the door to community ownership, allowing local people to reap the benefits of the electricity they generate.

Purpose of the Plan

The aim of the Local Power Plan is to put power in the hands of communities, with a vision of every community in the UK having the opportunity to own a local energy project by 2030. GBE has set the specific goal of supporting at least 1000 local and community projects in the first phase of the plan by 2030. This power in the hands of the community will have a positive ripple effect throughout the local area, including cutting bills and creating jobs. GBE’s goals for this project are set out in more detail below.

Communities get power back

Local communities in the UK have little ownership over their power. While some projects have started to be developed, for example, Westmill Energy in Oxfordshire, which encompasses three organisations for wind, solar, and other renewable energy. The Local Power Plan makes specific comparisons to Denmark and Germany, where over half of wind and solar respectively, are owned by citizens. GBE proposes that the UK could follow this lead through increased funding, readily available advice, and more government support.

Cutting bills and transforming communities

Clean energy projects which are owned by local government and energy groups can lower energy bills for local buildings, leaving more money free to be reinvested into the community, and can generate revenue that can also be reinvested.

For example, a school with solar panels can use this energy directly to reduce their energy bills, thus freeing more money for investment back into the school with positive effects that can be distributed across the community.

Creating local jobs

Through supporting local projects and developments, the Local Power Plan will also create local skilled jobs directly, as well as creating further jobs in the area through boosting the local economy.

Strengthening energy security

By focusing on local, and crucially renewable, energy the Local Power Plan can assist with the energy security of both the local communities and the UK as a whole, by improving flexibility and reducing our exposure to volatile fossil fuel markets. Sharpe Pritchard has already considered how biodiversity is important to national security, and you can read more about that .

Who is it For?

This support is aimed at broad range of stakeholders, from members of the public to local authorities, community energy groups, and other public sector organisations to partner with projects that are tailored to, and feedback into, local communities.

What Support Does it Provide?

Direct funding and finance for projects

GBE is developing a range of funding solutions, such as targeted grants, loans, and project finance, which will be available for all stages of the project. In particular for local governments, partnership grants will be available for joint projects with local community energy groups. For these community energy groups support might include early-stage feasibility studies.

Later in 2026 GBE plan to release more details on the funding available, including their Capital Toolkit. This Toolkit is set to include three different forms of support:

• Emergence and development grants
• Construction and operation finance
• Local investment funding

Further to this, GBE will also continue to fund a pipeline of local government and community energy projects, work with the National Wealth Fund and private finance institutions to close market gaps, and develop longer-term plans to encourage wider investment in community energy.

Expert support and advice for capacity and capability building

GBE recognises that one of the most challenging parts of developing such energy projects is turning an initial idea into a business case. Therefore, GBE will provide expert support to communities to help them to do exactly that. GBE intend for this advice to be available at different levels, from members of the public with ideas, to a local authority planning a major scheme.

As part of this, GBE will develop three core functions:

• A strong partner network
  • GBE will develop strong relationships with a range of different partners to facilitate a multi-faceted network of support.
  • This will include:
    • Strategic partners – such as Ofgem, Distribution Network Operators, and NESO.
    • Project partners – commercial partners for development and delivery of projects.
    • Local Power Plan partners – including community energy groups and local authorities.
• In-house expertise and regional support
  • GBE will develop in-house expertise which will complement existing regional support.
• A robust range of templates and guidance documents
  • GBE will create a toolkit with templates and guidance which will help communities, energy groups, and local governments get the information they need at different stages of project development.

Long-term plans to unlock wider investment in community and local energy

In addition to the funding from GBE, there are plans to attract more private investment into local and community energy. GBE suggests that as things currently stand, there is little clarity as to how local communities can turn energy projects into revenue.

GBE proposes that if communities have a clear route to sell the power generated through their projects, they can attract investment more easily and generate greater returns that can be used for local needs. GBE is looking to develop models to facilitate this.

Policy and regulatory changes

DESNZ is supporting GBE through policy and regulatory changes. They are working with Ofgem and NESO, among others, to support local authorities and deliver the wider objectives, such as strengthening energy security.

Across 2026 and 2027, DESNZ will:

• Make it easier for communities to own a stake in projects
  • DESNZ is currently consulting on putting together a mandatory shared ownership offer model, to encourage community ownership.
  • Under such a model, community energy groups would have the opportunity to invest in renewable energy projects, and the share they own would be considered to be owned by the community.
  • Shared ownership is beneficial as it can facilitate a first move into a new project without taking on full responsibility, allow access to larger projects which could provide greater financial returns, and give local communities a greater say in projects in their local area.
  • More information on this is expected to be released in spring 2026.
• Give communities fair access to energy markets
  • Work on code modifications to P441, P442, P444, and P415 with Ofgem and Elexon to make it easier for local energy projects to benefit the community.
  • Make markets more accessible for communities through supply licence legislation.
  • Unlock long-term Power Purchase Agreements between community energy groups and public buildings which benefit local people by providing more affordable green energy and local energy groups through secure income.
  • Look across the UK to see what future reforms might be needed to support disadvantaged communities.
• Make it easier for communities to sell their power
  • For example, this might include improving incentives for licensed suppliers to provide services and tariffs for community energy schemes.
• Make the grid connection process and experience easier
  • Work with Ofgem to improve network company services standards following on from the Connections End-to-End Review.
  • Bring together working groups across Ofgem and Distribution Network Operators to support community energy projects.
  • Develop a Regional Energy Strategic Plan with Ofgem, NESO, and Distribution Network Operators to optimise the system as a whole.
  • Recognise and work with specific requirements across Scotland and Northern Ireland.

Key Takeaways for Local Authorities

For local authorities, the Local Power Plan marks new opportunities for funding, clearer routes to market, and dedicated support to help them lead and assist energy projects in their local communities at different scales. Local authorities will be primary partners in co-developing and co-owning local-energy projects. Crucially, the anticipated regulatory changes will make it easier for local authorities to reap the benefits of local energy markets.

Experts on Your Side

Sharpe Pritchard has extensive experience advising local authorities and a strong track record in renewable energy which places us in an excellent position to support you with Local Power Plan projects. To find out more, contact our experts today.

Sophie Read is a Paralegal at Sharpe Pritchard LLP.

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